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The Dark Side of the PlayStation 3 Launch

An anonymous reader writes "Kotaku is running an article prompted by an email from a foreign student in Japan. The reader unveils the sad reality of the modern gaming industry. Japanese businessmen made ample use of homeless people and Chinese nationals to obtain PS3s for re-sale. There was also a large amount of pushing and shoving, some fights, and almost no police presence at the most crowded stores." From the article: "Based on my observations of the first twenty PS3s sold at Bic Camera, they were all purchased by Chinese nationals, none of whom bought any software. After making their purchase, television crews asked for interviews but all were declined. These temporary owners of PS3s would then make their way down the street where their bosses waited. After several minutes, a dozen PS3s were rounded up, as their Japanese business manager paid out cash to those who waited in line for them. I witnessed a homeless-looking Chinese man, in his sixties or seventies get paid 20,000 yen for his services and was then sent away." Update: 11/12 05:40 GMT by Z : You're right. Sony only shares a portion of the blame here. Offsides on my part.

35 of 505 comments (clear)

  1. Sony is supposed to do what? by Anonymous Coward · · Score: 5, Insightful

    Why is Sony getting blamed here?

    1. Re:Sony is supposed to do what? by Gentlewhisper · · Score: 4, Insightful
      Because Sony should release more than a handful of consoles. If they haven't produced enough to do a proper release that doesn't create artificial over-demand, they shouldn't release. It's called corporate responsibility.


      F.U.D.

      If Sony produced enough then the same poster will whine about it being released a few months later than it should, and end off with a "Think of the eBay resellers!!!!!111".

      If anything blame capitalism, that's right. If the whole world were communist, free standard issued Mao Ze Dong PS3 for each family! No such issues!
    2. Re:Sony is supposed to do what? by donaldm · · Score: 4, Insightful

      Why is Sony getting blamed here? -- Definitely insightful since it really is a media beat-up.

      In any limited supply launch and it does not have to be a console you are always going to get people who will take advantage of the situation. Normally we call these people "scalpers" and some not so nice names as well, but in reality it is supply and demand. Basically there are people who will pay ridicules prices for something because they are normally too lazy to stand in-line and this is what these people are counting on.

      To blame Sony for this is just plain stupid. If people did not want this machine then it would not sell and we know that is not true. What is actually good for Sony here is the fact that the IMHO "idiot" who will pay well over the market rate will most likely have the money to pay for games which is how Games Manufacturers makes money.

      I think we can call this a "win" (queue sitter US$170), "win" (scalper US$???? - US$170), "win and loose" (the idiot who buys US$????) and "win" (games - approx US$30 to US$60) and "win" (Sony - percentage of games sold).

      Disclaimer. It is my opinion that a person who buys a product way over the its market rate is either very wealthy and an idiot or just a plain idiot. Still without these people scalpers would not exist.

      --
      There ain't no such thing as proprietary standards only proprietary formats. Standards are by definition open.
    3. Re:Sony is supposed to do what? by HUADPE · · Score: 4, Informative
      Disclaimer. It is my opinion that a person who buys a product way over the its market rate is either very wealthy and an idiot or just a plain idiot. Still without these people scalpers would not exist.

      Not always. They (evidenced by paying $1500+ as other /.ers cited), have very high reservation prices (that is the max price they are willing to pay). If you make the rough equivalent of $500/hour (ask about rates at your local corporate law firm if you don't believe that number), then standing in line for 4 hours would be worth $2000 of opportunity cost to you. Paying $1500 for the scalped version is a savings of about $1100 for this hypothetical person ($2000 opportunity cost + $600 console price) - $1500. Or they could wait for demand to settle down and buy it later, but then there is an opportunity cost of waiting (in lost gaming time / bragging rights), which they price at over $900 ($1500 scalper price - $600 retail price).

      Not saying this applies to most people, just people with insane amounts of either money or utility derived from gaming. Still, it is perfectly possible for a rational person to buy a scalped console, and really have that be the best value for them.

      And yes IAAES (I am an economics student)

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    4. Re:Sony is supposed to do what? by DrEldarion · · Score: 4, Insightful

      Which ironically results in them ending up on EBay anyway, sold to the highest-bidding rich guy. ... and then Sony gets blamed anyway by the morons like Zonk who claim that the profiteering is somehow Sony's fault.

  2. Not just Sony's fault by davmoo · · Score: 3, Insightful

    Congratulations, Sony. Nicely done.

    The end users who buy from these middlemen are *every bit* as guilty as Sony or the middlemen. If it weren't for these buyers, there would be no market for the middlemen.

    --
    I want a new quote. One that won't spill. One that don't cost too much. Or come in a pill.
    1. Re:Not just Sony's fault by Longtime_Lurker_Aces · · Score: 5, Insightful

      Actually... one could quite easily argue that there is nothing wrong here and that this is a perfect example of a free market working.

      Person A is willing to spend X dollars on a system, but not the time waiting in line.
      Person B is willing to spend the time waiting in line to buy a system at Y to sell for X.
      End result: both parties satisfied.

      The only flaw is that Sony should be taking the profit for this instead of letting third parties do it. Imagine if they used an auction-like system (hey, if google ipo can do it) then the people who value the PS3 most get one, and sony keeps all the profits.

    2. Re:Not just Sony's fault by DrEldarion · · Score: 4, Interesting

      Artificial scarcity? They're having slow production. You think they only WANT to have this many units for the Japan and US launch, and push the Europe launch back so far? When Nintendo is launching a highly-awaited product at the same time?

      This is not Sony's fault in the least, and it REALLY shows how anti-Sony these boards are with people actually claiming that it is.

  3. How's that guy in the mirror, Zonk? by Wavicle · · Score: 5, Insightful

    Congratulations, Sony. Nicely done.

    Heaven forbid we blame the scalpers... or the people willing to buy a PS3 at a premium from the scalpers. Why would we do that when there is a giant corporation we can blame for the ills of society? Damn that holiday season, we are helpless against the dynamic duo: Christmas and Sony. Won't somebody think of the children (especially those who will be deprived of a PS3 this christmas?)

    --
    Education is a better safeguard of liberty than a standing army.
    Edward Everett (1794 - 1865)
  4. Problem? by insecuritiez · · Score: 4, Insightful

    I don't see much of a problem here. The people who purchased had the money, theirs or not they should get the product. If I can afford dozens of PS3s and can afford to pay dozens of bums to stand in line and buy them, then I'll get dozens of PS3s. How can their be a law against that in a country that regards itself as free (Japan)?

  5. Whiskey Tango Foxtrot? by JeanBaptiste · · Score: 4, Insightful

    I fail to see how Sony is in any way responsible.

  6. Blaming Sony is ridiculous by codefrog · · Score: 5, Insightful

    There's not really any practical way of preventing scalping is there?
    - float the price high enough to stifle demand (almost there already!)
    - somehow make a PS3 un-transferrable (can you imagine the screams?)
    - magically come up with more PS3s
    - wait until the factories are running full-bore before starting to release any PS3s

    Now, concert and sport ticket scalping is another story, but not I think relevant here.

    Anyhow IMO blaming Sony for this -- or even really considering it to be a problem -- is pretty mistaken.
    Some homeless guys don't get to play with their new PS3s... I'm crying my little heart out here.

  7. What's with the Sony put-down? by dannycim · · Score: 5, Insightful

    Congratulations, Sony. Nicely done.

    Ok, so Sony makes a product, a lot of people want it, some resort to unscrupulous tactics to get them, and somehow that's Sony's fault?

    All this Sony bashing is getting ri-goddamned-diculous.

  8. 20,000 yen by morcheeba · · Score: 3, Informative

    is about $170

    1. Re:20,000 yen by Rosyna · · Score: 3, Funny

      20,000 yen is also about $1329

      In canadian dollars?

  9. What? by RyoShin · · Score: 5, Insightful
    Congratulations, Sony. Nicely done.
    Yes, because Sony told people to utilize homeless people and push and shove to get a PS3.

    Don't get me wrong, Sony has done a lot of bad shit, and has been very arrogant when it comes to the PS3, but this kind of behavior should be attributed expressly to the consumers. Okay, one might argue that Sony created an artificial shortage (blue laser conspiracy?), but that's no reason someone has to be an asshole. It isn't a necessary product, so the fault lies almost entirely on the consumers.

    Come on, Zonk. I'm pretty anti-Sony, too, but you don't need to redirect blame for something like this. There's lots of other stuff Sony has done to be called on.
  10. From an economist... by Lurker2288 · · Score: 4, Insightful

    It's amusing to me that folks have no problem with somebody dropping hundreds of dollars on a console, but hiring homeless people to scalp them is some huge crime. Obviously the homeless guys felt taking some money to wait in a line was a better use of their time than whatever else they'd normally do--they made out here. As for the people who hired them, well...would you expect Steve Jobs to mow his own lawn? Why should he, if he can afford to pay someone else to do it. And as for Sony, like any company, they respond to incentives: in this case, fewer units = more demand. If you don't like it, change their incentives by not buying their shit.

  11. This Is Getting Boring by Anonymous Coward · · Score: 5, Funny

    Slashdot has just jumped the shark.

  12. Giving Work To The Homeless by QuantumG · · Score: 4, Insightful

    These Japanese businessmen should be ashamed!

    --
    How we know is more important than what we know.
  13. Re:That's just despicable by DilbertLand · · Score: 5, Insightful

    Yeah, I don't see the problem either...you end up with 3 happy people. The homeless guy gets paid for standing in line... The middle man makes a nice little profit... The end user with lots of money gets one of the first units without having to stand in line (and these are probably the exact customers that sony will want to have their system - they buy all the latest games right at release instead of waiting for them to hit the bargin bin)...

  14. Re:Corporate vs. Personal Responsibili by QuantumG · · Score: 5, Insightful

    WTF is uncivilized about buying something is underpriced and selling it for a profit?
    WTF is uncivilized about hiring people who are homeless?
    Man, you people have some fucked up values.

    --
    How we know is more important than what we know.
  15. Communism by Z34107 · · Score: 3, Insightful

    Wow, I really don't know where to begin with your post.

    The Cell chip is expensive and difficult to manufacture. (Although each cell die has 7 cores, 8 are manufactured on each die in the expectation that one will fail. Post-manufacture testing finds the broken core and disables it, finds no broken cores and disables one anyway, or finds the whole chip ruined and scraps it.) That, and the expensive Blu-Ray drives are difficult to make, too.

    They sell at $600 a pop. They'll go on eBay for much more than that, I'm sure. The amount of money Sony could make is limited by how fast they can produce consoles. So, do you think Sony is making consoles as fast as humanly possible, or do you think Sony has no interest in money?

    If the whole world were communist, free standard issued Mao Ze Dong PS3 for each family! No such issues!

    And, under communism, there would be no PS3. What part of a state-run economy do you think values game consoles? Values them enough to invest millions in research and billions in retooling factories for the new tech? State run farms in Russia, China, Cuba, and Venezuela left/leave people starving. You think a system in which people lack "standard issued Mao Ze Dong [sic]" bread are going to have PS3s? Or televisions? I'm sure they'd settle for houses.

    You also forget that capitalism is the reason the PS3 exists in the first place - if Sony didn't have a chance to make $bucks, do you think they'd spend years developing the console? Crawl out of your hole and show me a communist nation that even has Playstation 2s? (China ceased to be communist for all practical intents and purposes when they, shock, adopted mostly-free market capitalism as their economic system)

    --
    DATABASE WOW WOW
    1. Re:Communism by heroofhyr · · Score: 3, Insightful

      Can't really decide which poster to agree with...on one hand the PS3 was so costly to develop and manufacture that it isn't a surprise it's so expensive and running out and I don't think it was some sort of Big Sony Conspiracy...on the other hand I don't like replying to these types of posts and tacitly endorsing the offtopic, pro-capitalist rants that always get modded +3, 4, 5 Insightful just because the people with Modpoints happen to agree politically despite the fact that the post has nothing to do with the article. And on the other hand again, am I the only one who remembers when a console used to come with a game and two controllers? If it's really just a matter of quantity supplied being too low and has nothing whatsoever to do with gouging consumers, why the hell does it always feel like I'm paying 4 times more for the state of the art system than I was 20 years ago when I end up having to go back to the store and buy something else (another controller, a single game for the system, a memory card, cables for the television, etc.)? Oh, and for the record communism with a lower-case 'c' does not imply state-controlled anything, and China hasn't been legitimately called Communist, Socialist, or whatever you want to pretend it was, since the late 70s before Deng Xiaopeng. It's little more than a slave state with forced labour for pennies, which for all the platitudes and lip services from Western capitalists about freedom and liberty, serves their need for cheap labour so well that I doubt they'd really want it to change.

      --
      brandelf: invalid ELF type 'KEEBLER'
    2. Re:Communism by superpulpsicle · · Score: 4, Insightful

      Is ok to start a series called "Bum Fights" in the U.S and have some exec make millions on it.

      Is NOT ok for a foreign person to hire a homeless guy to wait in line for a PS3.

      I feel sick right about now.

    3. Re:Communism by luwain · · Score: 3, Insightful

      There is nothing wrong with capitalism: supply and demand, opportunism, etc... I saw PS3s go for $2400 on e-bay. The people who bought them were happy (and could afford them), the people who sold them were happy, Sony is happy, the Chinese who stood on line and got 20000 yen for their trouble are happy. So what's the problem? I suppose I'm a little unhappy because I can't afford $2400 for a game console, and I can't get one for $600 before Christmas, but, to tell the truth, I wouldn't spend $600 for a game console anyway. I just got my kid "MLB The show" (for the PS2) for his birthday and he was ecstatic. I'm pretty sure he'll be content with the PS2 for a while until there's some "gotta-have" game that's on the PS3. By that time I'll probably be able to pick one up for $200 (while the 'latest-greatest' will be going for mega-bucks on e-bay), and I'll be happy. Now some people might say that the rich are getting richer (those who can buy up a bunch of $600 PS3s and resell them), but let's face it, the rich are going to get richer anyway, and in capitalism some of the poor get richer, and some of the middle-class get richer, too. So everyone is happier...

  16. are you fucking kidding me? by bunions · · Score: 4, Insightful

    "Update: 11/12 05:40 GMT by Z : You're right. Sony only shares a portion of the blame here. Offsides on my part."

    Oh, they only share a portion of the blame? That's awfully magnanimous of you, but just exactly why should they take any blame? What should they have done? NOT sold a PS3 to someone because they looked shabby? Should they have insisted on some sort of contract that the customer signs that promises to not resell it?

    This is just shameful. Honestly, did Zonk's mom used to beat him with a playstation or something? The constant Sony-bashing is just insane. And it's not like you have to look real far to find something they actually DID that was wrong.

    --
    there is no need to sign your posts. this isn't usenet. your username is right there above your post. stop it.
    1. Re:are you fucking kidding me? by MikeBabcock · · Score: 3, Insightful

      You're insane -- you think that Sony should have excluded all their 'real' customers in favor of those rich enough to bid on the units instead? To what end? And for how long? The first thousand? The first million? They'll sell out the first few million units without a single unit being on a shelf for 24 hours straight ... this is a police/store/social problem, not a business one.

      --
      - Michael T. Babcock (Yes, I blog)
  17. Re:Corporate vs. Personal Responsibili by siodine · · Score: 5, Insightful

    No, it's called capitalism.

  18. Artificial Scarcity by Nazmun · · Score: 3, Insightful

    Ugh, yeah... Sony's creating an artificial scarcity to lower their shipments to be way below demand rather then sell out of 500k or more units at launch. That whole blu-ray component shortage was just a fake excuse. It's a vast conspiracy that includes other blu-ray manufactures. Because selling less units then they can make is good for business.

    --
    Hmmm... Pie...
  19. Waitasec by Daniel+Phillips · · Score: 5, Insightful

    The end users who buy from these middlemen are *every bit* as guilty as Sony or the middlemen.

    Which is to say, guilty of exactly nothing. Guilty of giving a little bit of paying work to homeless people. Anybody thought to ask the homeless people what they thought of the deal? No that would make too much sense.

    What a stupid troll article, the only interesting thing is how many responders took the bait uncritically.

    --
    Have you got your LWN subscription yet?
  20. Re:Funny to see fanbois run to Sony's rescue by DrEldarion · · Score: 4, Insightful

    That said, it's funny to see the same fanbois that criticized MS for all of the issues surrounding the 360 launch (fights, eBay profiteering, etc.), run to Sony's defense when it happens to their console launch.

    Fanboys? How about people who just think that it's absolutely ridiculous and nonsensical to blame the company? It wasn't Microsoft's fault, it's not Sony's fault, and it won't be Nintendo's fault at the Wii launch.

    You can blame both companies for just not making enough supply to meet demand

    Er, no, you can't blame the companies. They are/were pumping them out as quickly as they can/could. The blame here (if there is any in the first place) lies solely with the people doing it. Honestly, what are the companies supposed to do? Only begin to sell them once they have enough for EVERYONE IN THE WORLD who wants one to buy one?

  21. Nice by MaestroSartori · · Score: 4, Insightful

    I work for Sony, but this post is all mine and nothing to do with them.

    Sony have taken a lot of flak lately, and it's probably been mostly justified. This, however, is the shittiest smear-job I've ever had the misfortune to read on this site. I won't be returning to the site after this post, at least once this story has run its course (so if there's any replies to this I'll answer)

    How in the name of Zeus's butthole does Sony bear any responsibility whatsoever for the actions of people who aren't Sony employees? Did Sony direct these people to hire the homeless? Did Sony force anyone into doing anything, in any way? If a guy kills another guy so he can steal his PS3, will it be Sony's fault for making it? Of course not, all of these suggestions are absurd. So why attempt to shoehorn Sony into this, trying to heap more hate and blame on a company which already has so much you can fairly criticize it for?

    Criticize us about rootkits, about batteries, about E3 presentations or too much hype, about perceived arrogance or copying Nintendo or making PS3 too expensive or not having enough of them, or about the quality of our hardware or software. You don't even have to make it constructive criticism, if you don't want to. But please, for the love of whatever, criticize us for those things we're at least partly responsible for! The actions of completely unrelated third parties aren't our bloody fault!

    Anyway, enough from me. I've had a /. account for many years longer than I've worked for Sony, but this story has prompted me to leave the site. It's just a little bit too much unreasoning, undirected hatred directed at me from people supposedly smart enough to know better.

  22. Yes, Sony is to blame by TorKlingberg · · Score: 3, Interesting

    As every other post seems to defend Sony here, I have to object.

    Just like Microsoft did with the 360, Sony is releasing a very small amount of consoles at a price far below the market value. Sony isn't making money now. The reason is to make the PS3 seems desirable and popular for when they release the big batch just before the hollidays. Sony _wants_ headlines about PS3s selling out quickly. And what better way to get media attention than violence?

    No, I'm not saying that this is all Sony's fault, or that they are juridically responsible. But I think it is a problem when companies plan for and profit from violence at product releases.

  23. Re:Corporate vs. Personal Responsibili by Knuckles · · Score: 4, Funny

    Yeah, what he said, greed and exploitation.

    --
    "When I first heard Daydream Nation it quite frankly scared the living shit out of me." -- Matthew Stearns
  24. Comment removed by account_deleted · · Score: 4, Insightful

    Comment removed based on user account deletion